7 Tips for Nailing a Bank Loan PitchThe quality of your presentation can make the difference between landing a loan or not.
As a small business owner, at some point you may find yourself in front of bank loan officer asking for money. If you’re prepared, you’ll have the basics — an effective business plan, a good credit score and the ability to speak knowledgeably and realistically about financial projections, for example. But if you’re really prepared, you’ll also have something else: a compelling, polished pitch.
Assuming your business is loan worthy, your presentations skills can make the difference between walking out with an influx of new capital and walking out empty handed.
1. Practice until it’s perfect. “Practice, practice and practice your presentation in front of a live audience,” said Moltz. Pitch to an employee, family member or friend. It’s not a bad idea to videotape your presentation and take notes as you watch. Make revisions as needed.
2. Cater to your audience. Do your homework before the meeting. “Know your audience by finding out who will be there and how they make their investment decisions,” said Moltz. Adjust your pitch accordingly.
3. Follow the emotion – logic – motion formula. “All buying decisions, which is what you’re trying to get the investor to do, buy into you, are made in a cycle of emotion – logic – motion,” said Spence.
“You must begin your presentation by getting the investor emotionally interested in your compelling story that focuses on what is interesting to them, not to you.”
“Next, you may give them just enough data to logically justify investing in you. You want to make sure that the data is accurate and realistic, I have seen so many investor pitches where the entrepreneur wildly exaggerates the potential market and revenue, which immediately destroys the credibility.
“Lastly, you have to give an emotional ‘call to action’ that will get the potential investor to want to be involved with your project and give you money. If you try to just give an emotional argument, the investor will not have any data to make the decision on. If you give them only data, the investor will not be emotionally engaged in you, your product or service.”
4. Explain the problem your product or business solves. Instead of focusing on why you started your business, talk mainly about what’s in it for the investors. “A compelling story to an investor focuses on the uniqueness of your product/service, the size of the potential market, level of risk, potential competition, ROI and payback,” said Spence.
“It’s nice that your product is cool, fun and environmentally friendly, but people invest money to make money, and you have to explain specifically how your invention/product/service is going to solve a real problem in the marketplace and that there are real customers who will want to buy.”
5. Show data, don’t tell. You’re going to want to present critical data to your investors — profits made, units sold, projected growth, etc. Instead of spewing off numbers, Moltz advised conveying them with graphics.
Don’t feel compelled to show every little piece of data, however. Spence said it’s best to distribute handouts so investors can read more and study the numbers later.
6. Don’t over-rely on slides. “Be able to do the entire presentation without any slides just in case there is a problem with the equipment,” said Spence.
7. Remember public speaking basics. Spence said this means not pacing, avoiding filler words like “um” (practice should help), maintaining eye contact, dressing appropriately, speaking in a loud and clear voice, making sure you’re well groomed and talking slowly enough to be understood.
Banks and investors care about one thing: Getting their money back. Follow these tips, convey calmness and confidence, and you’ll give your audience the sense that they’re making a smart decision in supporting you.